Broke airline stiffs hotels

Mon, 2005-11-21 16:13

It's bad enough that the lodging business must depend on an antiquated, broken-down airline system as a major feeder of business. As the U.S. airline industry totters toward mass bankruptcy, the fiscally healthy hotel business has no choice but to sit on the sidelines and hope it all works out.

Now to pour salt in the wounds, Northwest Airlines, which recently filed for Chapter 11 bankruptcy, has left a number of hotels in the Twin Cities area holding the bag for hundreds of thousands of dollars in unpaid hotel bills for which the sick airline will probably never be able to make good. According to reports in a local business journal, several properties were stiffed for tabs totaling $50,000 to $100,000. For other properties, the bills were less but still substantial.

From a personal point of view, several GMs complained that the write-offs may be enough to keep some properties from making their budget numbers for the year, placing the bonuses for GMs and other management personnel in jeopardy.Ã¢€”Ed Watkins, Editor